Jonathan Burke & Associates has answers to "Frequently Asked Questions"

Jonathan Burke & Associates is always eager to reply to any questions you might have about appraisals in Saint Louis and Saint Louis County. Contact Jonathan Burke & Associates today to see how we can help solve your specific valuation problems.

Describe an appraisal
What does an appraiser do?
What are the reasons a person would need a real estate appraisal?
What is the difference between an appraisal and a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
Upon completion of the report, what assurance is there that the final number is trustworthy?
What are the requirements to be a certified appraiser?
Who hires Jonathan Burke & Associates
Where does an appraiser get the information used to estimate values in Saint Louis County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Does the appraiser need anything from the homeowner in advance?
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?



Describe an appraisal   (Go to list of  questions)

The procedure of creating an appraisal consists of an evaluation which leads to an opinion of value. The appraiser must use a few "approaches," typically three, to arrive at the estimation of market value. One of the methods is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, then adding the land value. Another of the methods is the Sales Comparison Approach - which concerns discovering a comparable analysis to other similar properties within a close vicinity which have recently sold. The Sales Comparison Approach is commonly the most accurate and clearest indicator of a liklely sales price for a home. One of the least common approaches in appraising houses is the Income Approach, which is generally used to find the market value of a property based on what an investor would pay based on the income produced by the building.

What does an appraiser do?   (Go to list of  questions)

An appraiser provides an unbiased and well substantiated opinion of market value, to be used in making real estate transactions. Appraisers document their analysis in appraisal reports.


What are the reasons a person would need a real estate appraisal?   (Go to list of  questions)

There are a lot of reasons to order an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal include:
  • If you are applying for a loan.
  • If you would like to lower your property tax burden.
  • To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
  • To challenge inflated property taxes.
  • To handle an estate.
  • To give you a negotiating tool when purchasing real estate.
  • To find a likely sales price when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because an official agency such as the IRS requires it.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
Click here for a more extensive explanation of the process dealing with getting an appraisal.


What is the difference between an appraisal and a home inspection?   (Go to list of  questions)

The appraiser is not a home inspector nor does he/she do a complete home inspection. A third-party home inspector will evaluate the structure of the property, from the top to the foundation. The stereotypical property inspector's report will contain an evaluation of the integrity of the property's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (Go to list of  questions)

Frankly, it's like comparing Shakespeare to reality TV. The CMA depends on indefinite local market trends. An appraisal utilizes comparable sales that can be proven by records. Location and architectural prices are also a priority in an appraisal. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the biggest difference is who's doing the report. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent voice, with no vested interest in the property's value, unlike the agent, who gets a commission based upon the price of the home.

What are the contents of an appraisal report?   (Go to list of  questions)

The main objective of an appraisal document is to provide a value opinion, and depending on the scope of the report, you'll usually see the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • The type of value contained and a definition of the value reported.
  • The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
  • Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible considerations.
  • All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • The scope of work considered to complete the job.
For a more detailed look at all that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the report, what assurance is there that the final number is trustworthy?   (Go to list of  questions)

In communicating an appraisal report, each appraiser must ensure the following:
  • That the information analysis implemented in the appraisal was suitable.

  • That grave errors of omission or commission were not committed individually or collectively.

  • That appraisal services were not executed in a careless or negligent manner.

  • The final appraisal report was understandable, credible and defensible.
To become a state licensed appraiser, there are education requirements as well as real world experience that must be attained - all with the objective of gaining the skills required to provide unbiased value opinions. Likewise, appraisers must follow a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for developing an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Go to list of  questions) Regulations regarding licensing and certification vary from state to state. However, licensing and certification is commonly associated with many hours of classroom study, tests and real world experience. Once licensed, he/she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires Jonathan Burke & Associates   (Go to list of  questions)

Mortgage lenders are an appraiser's typical customer, needing their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does an appraiser get the information used to estimate values in Saint Louis County or other areas?   (Go to list of  questions)

Compiling data is one of the primary tasks an appraiser does. Data can be divided into Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is collected from a variety of sources. Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables. To verify actual sales prices, we research tax records and other public documents. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood servers.

And most importantly, the appraiser assembles general data from his or her past experience in creating appraisals for other properties in the same market.

Why do I need a professional appraisal?   (Go to list of  questions)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. When selling your house, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. When buying, you can avoid overpaying by commissioning an independent appraisal. For people settling an estate or divorce, an appraisal from Jonathan Burke & Associates is the best way to ensure assets are divided fairly. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

My mortgage statement has an item on it for PMI? Can I get rid of that?   (Go to list of  questions)

PMI is the common abbreviation for for Private Mortgage Insurance. It covers the lender in case a borrower defaults on the loan and the market price of the house is lower than the balance of the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

The amount you keep from getting rid of the PMI required when you got your mortgage pays for the appraisal in a matter of months. Nobody is more qualified than Jonathan Burke & Associates when it comes to analyzing real estate appreciation in Saint Louis and Saint Louis County. Contact us today.

Does the appraiser need anything from the homeowner in advance?   (Go to list of  questions)

The first step in most appraisals is the property inspection. During this process, the appraiser will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. Inside, make sure it is clutter free and that we can get to things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of exterior walls.

You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • A plot plan or survey of the house and land (if readily available).
  • Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
  • Find copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.
  • Most recent real estate tax bill from Saint Louis and or legal description of the property.

Define "Market Value"   (Go to list of  questions)

In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:

"The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."

Does the appraisal belong to the bank or the consumer?   (Go to list of  questions)

In most real estate transactions, the appraisal is ordered by the lender. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is entitled to a copy of the appraisal - it's usually bundled with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can do whatever they want with the appraisal.

How can I get the most ROI out of home improvements?   (Go to list of  questions)

The added value of a particular amenity truly depends on the local market. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

As a rule, the best ROI from renovating a home comes in the kitchen. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms weren't far behind, returning 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.